For More Information, Contact:
Charles Wagner
Law offices of Bernard Conway
100 East Walton #600
Chicago, Illinois 60611
Office   312 235 2052

November 11, 2010
Modification Mayhem: Chicago woman exposes  WELLS FARGO  in a Class Action lawsuit Chicago Attorney, Bernard Conway, filed a Class Action complaint late yesterday in the United States District Court for the Northern District of Illinois on behalf of Therese Crowley, Plaintiff vs. Wells Fargo Bank, N.A, d/b/a Wells Fargo Home Mortgage (Case # 10CV7256) for “failure to honor its contractual obligations under its Home Affordable Mortgage Program Agreements (HAMP Agreements) with its borrowers by not offering its borrowers loan modifications in compliance with the program.”   As the result of this failure, thousands of trusting homeowners were left in dire straits with no apparent recourse to saving their homes.
Crowley is a prime example of the type of homeowner that the HAMP programs were created to help.  According to her HUD counselor, Crowley was well within the guidelines of the program.   After her initial denial of her application by Wells Fargo, she escalated her HAMP request to the Office of the President of Wells Fargo.  Crowley continued to receive a dizzying array of conflicting information by various Wells Fargo Employees.   It became imminently clear the lack of transparency and multiple errors on the part of Wells Fargo made it impossible for Crowley to ensure the accuracy and compliance with HAMP guidelines for evaluating her application.  After 18 exhaustive months, three modification applications (3),  Wells Fargo repeatedly denied her HAMP requests .   Crowley would receive multiple letters and phone calls from  Wells Fargo encouraging her to Short Sell or Deed in Lieu the home to Wells Fargo; which would be in effect, to the sole benefit of Wells Fargo.  Had Crowley followed the suggestion to Short Sale by Wells Fargo, it would essentially have stripped Crowley  of any equity in the home.  Further, Crowley would discover that Fannie Mae, investor on Crowley’s loan, had extended an offer for a modification that Wells Fargo never presented to Crowley.  In fact, Wells Fargo repeatedly  claimed her “investor”(Fannie Mae) denied her Hamp Modification application.
A recent study shows that so called ―service providers like Wells Fargo make more money on a Foreclosure, Short Sale or Deed in Lieu transaction over the loan modification process.   Wells Fargo has a financial incentive to ignore the HAMP guidelines and work to force a sale of Crowley‘s Property.

The “robo-signing” foreclosure debacle is the tail end of this process.  The beginning is at the cynical approach by the Servicer which results in the wrongful denials of qualified homeowners for Hamp Loan Modifications.  Homeowners need to see a detailed explanation of their modification denials to ensure that the Consumer is receiving a fair and accurate assessment and determination of their applications.

As Crowley said, “During this 18 month ordeal, I have been haunted about the countless people who have taken their lender at their word and may have needlessly lost their homes because they did not challenge or further investigate their Lender’s refusal to modify their loan under The Making Home Affordable Program.  I am not just fighting for myself. I want to make sure other people won’t have to endure the same nightmare of harassment, frustration, and relentless stress that I have suffered. ”
Wells Fargo has received $25 Billion in tax payer money under TARP to aid homeowners for modifications.  To date they have only used a small fraction of that money relative to the amount of customer’s requesting HAMP loan modifications. Rather than utilizing the funds to aid homeowners, Wells Fargo is making it nearly impossible for  the qualified homeowner to achieve a HAMP modification.  To Crowley, this is just plain wrong.

8 Responses

  1. […] ILLINOIS CLASS ACTION VS. WELLS FARGO FAILING TO ……/23/ilinois-class-action-vs-wells-fargo… […]

  2. Peter – it has been reported that many banks returned the TARP money. Many of them did so, at least in part by packaging up more worthless paper and selling it to the FED RESERVE. That way they avoided the rules restricting them under TARP. BTW -who is the FED and where does their money come from? Watch for Sen Ron Paul on that one.

  3. The homeowner should be made aware of just how the calculation works or as stated above, the detailed denial of a hamp modification. I do believe however that it goes much deeper than that of just saying they make more money if they foreclose, short sale, etc. It means that if a securitized loan, does not the interest to the investors stop if a loan is foreclosed. Otherwise, the servicer has to continue to advance the funds even if the homeowner does not make the payment at all. When I hear people say they were approved for the Hamp modification, those seem to me to be people who are just 30 to 90 days delinquent, because after so much accrued interest, there is no way that property is going to be approved based on todays appraisals. This has always been a little confusing to me.

  4. They are supposed to give loan mods to homeowners, but they do not want to because they make more money by foreclosing. It is a total screw job on the homeowner, and HAMP needs to be changed so that there is incentive for the servicer to allow loan mods. Servicers are illegally foreclosing so that they can make more money. Disgusting!

  5. All of the lost hours. There should have been a magic wand that reduced everybody’s interest rate to 4%, across the board, no questions asked, for everybody.

    Then there should have been another magic wand that reduced interest rates on credit card debt to 2.9% for each card that the debtor reduces the debt on every month, then allow a 40% of what was paid as a respend allowance every month.

    Then if people still fail, assess if they have any built up equity, adding in 75% of the original down payment, and offer that as an incentive check for the homeowner to leave the home voluntarily or apply it as “rent” towards the home so they can buy some more time.

    The “rent” should be based on the 4% interest rate and a lower appraised cost if the home has gone down more than 10-20% in value.

    When the homeowner is six months from using up their remaining investment in the home, notify them so they can figure out what to do next.

  6. Peter, No “private right of action” unless 3rd party beneficiary pleaded.

  7. Didn’t Wells Fargo give the TARP money back? Are they legally obligated to put a homeowner in the HAMP program if they qualify?

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